Manila: An official of the publicly-listed producer of oleochemicals, specialty plastics, and food products expressed optimism for their operations this year amidst the impact of the Middle East crisis. D and L President and Chief Executive Officer Alvin Lao, during a media briefing, highlighted the company's preparedness by learning from past experiences and implementing measures such as taking care of their suppliers. This is crucial given the Philippines' status as a small market for foreign providers in terms of raw materials, global supply chain, and oil supply.
According to Philippines News Agency, Lao noted that while the first two months of the year appeared promising, the situation shifted following the military operations involving Iran, the U.S., and Israel that started towards the end of February. Despite this, he believes that "periods of disruption also create opportunities," referencing the company's response to the Russia-Ukraine conflict in 2022 and past oil crises in 1973 and 1979.
Lao elaborated on how the company, during the Russia-Ukraine war, had just reopened from the pandemic lockdown. Although the reopening was a positive development, the war introduced new risks. The company managed to secure additional suppliers and adjust prices for customers, but Lao emphasized that the current year might not mirror past experiences, as the duration of the Middle East conflict remains uncertain.
Lao explained that compared to newer businesses, D and L is well-prepared due to its extensive experience over the last six decades. He assured that the company has measures in place to address challenges, leveraging lessons from past crises. With 74 days' worth of inventories to sustain its manufacturing facilities, Lao stressed the importance of acquiring more inventory.
Last year, D and L recorded a 10.6 percent growth in recurring net income, reaching PHP2.6 billion. The fourth-quarter level saw a rise of 20 percent to PHP640 million. However, Lao refrained from making projections for the current year, citing the fragile situation and the inapplicability of previous assumptions regarding exchange rates, interest rates, and GDP growth. "It's so hard to project at the moment," he concluded.
